Warren Buffett’s Boss Berkshire Hathaway Continues Selling Bank of America Stock

Warren Buffett subsidiary Berkshire Hathaway (BRK-A, BRK-B) has sold more of its holdings in Bank of America (BAC), bringing its total to nearly $9 billion in recent months.

On Tuesday evening, the conglomerate announced that it had further reduced its stake in the country’s second-largest bank by 21.6 million shares, making about $862.7 million in profits from the sales.

Berkshire sold BofA shares in 10 of the past 11 weeks starting in mid-July, dumping a total of 218.5 million shares and earning $8.9 billion on the sales.

Berkshire still owns a 10.5% stake in the country’s largest bank, and Bank of America’s stock price has fallen about as much since Buffet began selling his firm’s oldest banking position.

BofA is still up 16% year-to-date, lagging rivals Goldman Sachs (GS), JPMorgan Chase (JPM) and Citigroup (C). Its stock was down slightly Wednesday morning.

Buffett and Berkshire have not yet specified the reasons for the sale. Berkshire remains the bank’s largest shareholder, with more than 800 million shares worth more than $32 billion.

“I don’t know exactly what he does because, frankly, we can’t ask and we wouldn’t,” Bank of America CEO Brian Moynihan said earlier this month at a Barclays conference.

The recent moves are notable given Buffett’s long history at the bank. He injected $5 billion into Bank of America in 2011 as the bank struggled to recover from the collapse of the subprime housing market that triggered the 2008-09 financial crisis.

The investment was not only a bet on Bank of America’s recovery, but also on the new leadership of CEO Brian Moynihan, who took over in 2009.

“We buy the stock, part of the stock, and life goes on. But he’s been a great investor in our company and stabilized it when we needed it at that time,” Moynihan added.

Bank of America’s financial performance is unlikely to decline in the near term, according to the latest forecast from Chief Financial Officer Alastair Borthwick presented at a conference on Wednesday.

The Federal Reserve’s rate cuts could help the bank as deposit costs fall and a large securities portfolio recovers.

Bank of America’s main lending revenue stream, net interest income, is expected to bottom out in the second quarter and grow from there through the end of the year, according to the CFO.

“We still believe that’s the case,” Borthwick said Wednesday at a conference in London hosted by Bank of America.

The story continues

“We’re now back to something that’s more like low growth, low inflation and potentially a reasonable rate structure that should create a fairly favorable environment for U.S. banks,” Borthwick added.

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas of finance.

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